ETFs Power Bitcoin Past $95,000 as Risk-on Mood Lifts Crypto

gist of the article with all citations properly formatted:

Bitcoin rose above $95,000 on Wednesday, fueled by growing inflows into spot ETFs and a broader risk-on market environment. The price surge came as US inflation data eased expectations for aggressive Fed rate hikes, shifting investor sentiment toward growth assets. Institutional demand for Bitcoin has remained robust, with ETFs recording a $753.73 million single-day inflow on Tuesday, the highest in three months.

The rise in ETF inflows reflects a shift in investor strategy. Traditional direct holdings of Bitcoin have faced volatility, while ETFs offer diversified exposure and institutional-grade custody. This trend has been supported by major financial institutions, including Morgan Stanley, which filed for its own spot Bitcoin and Solana ETFs.

BlackRock’s iShares Bitcoin Trust (IBIT) saw $70.66 million in outflows on January 12, while Fidelity’s FBTC recorded $111.75 million in inflows. Grayscale’s GBTC and HODL also reported gains. The ETF landscape continues to evolve, with cumulative inflows reaching $56.52 billion as of January 12.

Why Did This Happen?

The recent rise in Bitcoin and other crypto assets is tied to macroeconomic developments. The US Bureau of Labor Statistics reported softer-than-expected core CPI, reducing concerns about inflation and supporting risk-on positioning. This led to strong equity market performance and boosted demand for crypto as a high-risk/high-reward asset.

At the same time, institutional investors continue to shift capital into crypto ETFs. BlackRock’s IBIT remains the largest ETF by cumulative inflows, with $62.34 billion in assets under management. However, the ETF also faces redemption pressure, with $70.66 million in outflows reported recently.

How Did Markets React?

Bitcoin’s move above $95,000 marked a psychological milestone after weeks of consolidation. The price surge coincided with a broader rally in equities and precious metals, with gold hitting record highs and silver surging. Investors interpreted the rise as a signal of declining confidence in fiat currencies and increased demand for alternative assets.

Ethereum also saw increased activity, with spot ETFs recording $5 million in inflows after three days of outflows. Ethereum’s staking ratio has climbed to nearly 30% of circulating supply, indicating strong institutional and retail confidence in the network.

What Are Analysts Watching Next?

Analysts are closely watching Bitcoin’s ability to maintain its current trajectory. The key resistance level of $100,000 looms, with technical indicators suggesting bullish momentum. A breakout above $100,000 could signal a new phase in Bitcoin’s rally.

At the same time, regulatory and geopolitical developments remain critical. Robinhood’s CEO urged the US government to clarify crypto staking rules, highlighting the regulatory hurdles that persist for digital assets. Meanwhile, geopolitical tensions in Iran and Venezuela remain a concern, with potential spillover into financial markets.

Market participants are also watching for further ETF launches. Morgan Stanley’s entry into the space has raised expectations for more institutional involvement. If more major banks launch crypto ETFs, it could significantly expand investor access to the asset class.

Bitcoin’s performance relative to the S&P 500 remains a key metric. The BTC/SPX ratio has been consolidating for three months, and a sharp directional move could occur if macroeconomic catalysts emerge.

Ethereum’s technical outlook is also under scrutiny. ETH has failed to break above the $3,447 resistance level multiple times this year. Analysts suggest that a sustained move above this level would reinforce the bullish case for Ethereum.

Overall, the crypto market remains in a phase of transition. While Bitcoin and Ethereum continue to attract institutional demand, volatility and regulatory uncertainty persist as risks.